Steinhardt lost $2 million in Madoff scandal

After initially telling the Fundermentalist that he had no money invested with Bernard Madoff, philanthropist Michael Steinhardt told Bloomberg Wednesday that he actually lost $2 million that he had invested with J. Ezra Merkin’s Ascot Partners. Ascot, Merkin’s hedge fund, lost its entire $1.8 billion in assets with Madoff.

From Bloomberg:

“He never told me he was investing with Madoff, and he probably didn’t tell most of his clients, and I understand why,” Steinhardt said today in a phone interview. “Madoff, according to Ezra, was engaged in an analogous type of arbitrage so it was logical for Ezra to focus on Madoff.”

Steinhardt, 68, wound down his business in the 1990s with a fortune that Forbes magazine estimated at $500 million. Madoff, 70, is confined to his home on Manhattan’s Upper East Side after being accused of defrauding multiple investors of $50 billion. Merkin, the chairman of GMAC LLC, is liquidating one of his hedge funds after losses from investing with Madoff. He is a long-time acquaintance of Steinhardt, Steinhardt said.

“Ezra knew Madoff through his father as a respectable person,” Steinhardt said. “If he gave some of my money to Madoff and earned fees for doing so, it was not inconsistent with his agreement to manage my money in the best way he could.”

Steinhardt, who focused on collecting art and charities after retiring from managing other people’s money, is chairman of New York University’s investment committee.